The REIT formed to sell off Sears Holdings’ real estate portfolio has four assets under contract and another three in purchase and sale negotiations as it moves toward final liquidation.
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Seritage Growth Properties has just six properties that aren’t in sale negotiations or under contract, the REIT said in its third-quarter earnings results.
Seritage announced in 2022 that it would sell its assets piecemeal since no one wanted to buy the REIT as a whole. The company was formed in 2015 to sell off a retail real estate portfolio acquired from Sears Holdings, including former Sears and Kmart locations.
The four properties under contract are expected to generate about $240.8M. Those include a “premier development asset,” one vacant property and two other income-producing assets. The three other assets in purchase and sale negotiations should produce about $47.3M.
It expects up to $310M for the six remaining assets, which are either being marketed or expected to be marketed when market conditions are appropriate. The company doesn’t anticipate selling them until next year or later, according to the release.
The 13 properties Seritage has remaining interests in are in Florida, California, Pennsylvania, Texas, Virginia and Washington, according to its website. The portfolio totals about 1.3M SF.
“We continue to see good progress on our various asset sale processes,” Seritage CEO Adam Metz said in a press release. “We currently expect to see near-term closings for all three assets under contract with no due diligence contingencies, which, if completed, would allow us to make a sizeable prepayment of our Term Loan Facility outstanding principal balance prior to year end.”
The company paid $4M in July to extend the maturity date of its term loan facility to July 31, 2026. The outstanding principal balance at the time was $200M.
Metz took over as interim CEO when Andrea Olshan left the company in April. The company had 15 properties remaining at the time, down from 160 when shareholders voted to wind down the company in 2022.
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